Coal news and updates

ICF International has released its Q1 2014 forecast highlighting the impacts of proposed U.S. federal environmental regulations, and projections on pollution control installations, coal production, and renewable energy development.Power markets will be strongly influenced by projected coal retirements due to the requirements of the U.S. Environmental Protection Agency (EPA) Mercury and Air Toxics Standards (MATS) rule. Taking coal units offline as the economy continues to recover will create a need for new natural gas capacity. As this transition from coal to gas plays out at the same time gas prices firm, ICF projects energy prices to strengthen. These effects will be seen most strongly in the Midwest and Southeast U.S., where the majority of U.S. coal capacity is located. Additionally, recent nuclear retirements will remove base load capacity from the supply stack and pressure energy prices to the upside in the affected regions.

 

With two EPA rules, MATS and the Cross-State Air Pollution Rule, having gone before the courts this month and a number of rules still to be finalized over the coming year, generators and investors are being forced to make decisions under uncertain conditions. The potential for CO2 regulation of existing generators, with EPA's proposal expected in June of 2014, adds complications. In the face of those planning challenges, ICF's retirement projection for U.S. coal plants remains steady in the range of 60 GW by 2016, with more room on the upside as EPA advances CO2 regulations.

 

Despite the regulatory and market challenges facing it, coal market demand has started to show signs of life, although it will be well into 2014 or later before demand reaches 2011 levels, according to ICF. International prices remain depressed, which makes U.S. coal less competitive and will reduce U.S. exports in 2013 and 2014 compared with the record high exports in 2012. With gas prices expected to remain low for the next several years, and electric load growth at moderate levels in many areas, domestic coal demand will remain flat in the near- to mid-term with a gradual decline starting in 2025. Coal demand will remain flat despite the expected coal retirements through 2016 as ICF expect the remaining coal plants to run at higher capacity factors.

 

 

 

Source: www.fierceenergy.com